Is remuneration changing in the legal profession?

In recent months a lot of the talk regarding pay scales has been around the MoneyLaw trend sweeping magic circle firms, however it would seem the entire scale is beginning to slowly shift. While Cravath have taken to upping their newly qualified pay rate, other firms are making changes at the opposite end of the scale.

Clifford Chance was the first magic circle firm to embrace the concept of ‘superpoints’ when it introduced them last year, and since then a number of other leading UK firms have quietly followed their lead. While the former have remained quiet about whether they are yet to make use of the additional equity points, Freshfields Bruckhaus Deringer is known to have exceeded the waterline of their lockstep in order to hire a partner from Kirkland & Ellis in 2015. At the time it was reported that Ward McKimm was hired on around twice the firm’s top equity, perhaps suggesting that a new trend is emerging at the top end of the recruitment scale.

Around six partners are known to have received superpoints in the US amid Clifford Chance’s difficult post-merger integration with Rogers & Wells. Clifford Chance’s global managing partner, Matthew Layton is understood to be undertaking a large scale review of its equity points structure and addressing where its partners sit on the firms current lockstep, which runs from 40 to a plateau of 100, with the potential to extend to superpoints levels of 115 and 130.

The move is said to be an attempt to curb under-performance, keep well performing partners content, and stop partners defecting to high-paying US rivals. Some sources have also claimed Layton has de-equitised a number of partners this year, in some circumstances bringing 100-point plateau partners down to 70 points.

This shift marks a move towards a more flexible and increasing merit based remuneration structure and will no doubt be welcomed by hard working and dedicated partners, who may have consistently outperformed their peers without recognition as a result of the longstanding system.